A top Alibaba (BABA) executive on Tuesday said he was “astounded” by artificial intelligence data center investments in the U.S., strongly suggesting that the market has become a bubble.
Alibaba Chairman Joe Tsai issued the warning at the HSBC Global Investment Summit in Hong Kong, according to Barron’s. “I’m still astounded by the type of numbers that’s being thrown around in the U.S. about investing into AI,” Tsai said.
“People are talking, literally talking about $500 billion, several hundred billion dollars. I don’t think that’s entirely necessary. I think in a way, people are investing ahead of the demand that they’re seeing today, but they are projecting much bigger demand,” he said.
The rapid rise of artificial intelligence led to a surge in investments in AI data centers. The trend also triggered a rally in shares of companies like Nvidia (NVDA), Broadcom (AVGO) and Super Micro Computer (SMCI).
Fears Of Artificial Intelligence Bubble
But some analysts have warned that the investments may not pay off immediately. That has led to fears of an AI bubble.
U.S.-listed Alibaba stock was last up a fraction in morning trades. Nvidia shed more than 1%, while Super Micro Computer was up a fraction and Broadcom was mostly flat, last down a fraction.
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